The True Cost of Hiring Your Own Delivery Driver
Many businesses assume that hiring a full-time delivery driver is the most cost-effective way to manage logistics. At first glance, having a dedicated driver seems convenient and reliable. However, the reality is that the true cost of employing your own driver goes far beyond just the monthly salary. From vehicle expenses to administrative overhead and scalability challenges, there are several hidden costs that can quietly add up. This blog explores these costs and why on-demand delivery solutions like Lalamove can be a smarter alternative.
Unveiling the Hidden Expenses Behind In-House Delivery Drivers
Hiring your own delivery driver might seem like a cost-effective way to keep your logistics in-house. After all, having a dedicated staff member handling deliveries gives you control and consistency right? Not quite. Many businesses don’t realise that the true cost of hiring a full-time delivery driver goes far beyond salary.
A full-time driver in Singapore typically earns $2,000 to $2,800/month, depending on experience and vehicle type. Add in employer CPF contributions, overtime pay, bonuses, and allowances, and the total monthly cost climbs significantly. Additionally, unless your driver brings their own vehicle (rare), you’ll need to provide one, including COE and vehicle financing, insurance, road tax, fuel, maintenance, parking fees, and ERP charges. Owning or leasing a vehicle can easily add thousands per month to your logistics cost.
Navigating Legal, Insurance, and Compliance Complexities
Navigating the legal and compliance landscape for in-house delivery drivers can be complex and time-consuming. Businesses must ensure compliance with local labour laws, including CPF contributions, leave entitlements, and fair employment practices. Additionally, vehicle insurance and road tax must be managed meticulously to avoid legal repercussions.
The administrative burden of maintaining compliance can divert focus from core business activities. Ensuring that all legal requirements are met adds another layer of complexity to managing an in-house delivery driver.
Managing Recruitment, Training, and Retention Challenges
Recruiting a reliable delivery driver involves significant effort and resources. The process includes advertising the position, conducting interviews, and performing background checks. Once hired, the driver needs to be trained in company policies, delivery protocols, and customer service standards.
Retention is another challenge, as high turnover rates can disrupt operations and incur additional recruitment costs. Providing competitive salaries, benefits, and a positive work environment are essential but add to the overall expenses.
Balancing Flexibility and Scalability in Delivery Operations
Deliveries don’t happen 24/7. During downtime, you’re still paying your driver even when there are no deliveries to make. This leads to low productivity and poor return on cost, especially for businesses with inconsistent delivery demand.
As your business grows, you may need more drivers, more vehicles, and more admin support. Scaling up an in-house team takes time, money, and management bandwidth making it hard to adapt quickly to changing demand. This lack of flexibility can hinder your ability to meet customer expectations during peak times.
Comparing In-House Delivery Versus Outsourcing: Which Delivers Better Value?
Hiring your own delivery driver may seem like a straightforward solution, but once you factor in all the hidden costs, it can become a heavy and inflexible expense. Many businesses don’t realise the true cost of hiring a full-time delivery driver goes far beyond salary.
A smarter alternative is on-demand delivery with Lalamove. Instead of hiring a full-time driver, Lalamove lets you book professional drivers instantly, choose from multiple vehicle types (motorcycle to lorry), and only pay per delivery no idle time or overhead. It’s flexible, cost-efficient, and removes the burden of fleet and manpower management, allowing you to scale up or down anytime.
